Air India's parent company National Aviation Co of India (Nacil) is likely to report losses of 50 billion Indian rupees ($1.02 billion) for the financial year ending 31 March.
Nacil also owes 5.99 billion Indian rupees to the Airports Authority of India and 5.42 billion Indian rupees to jet fuel companies, India's civil aviation minister Praful Patel told the country's upper house of parliament in a statement.
Sources close to the airline say that revenues were around 160 billion Indian rupees during the 12 months. Patel also informed the house that the losses were due to "high operating expenses, which have been compounded due to the present economic recession resulting in a drop in passengers".
Nacil, which was formed in 2007 after the merger of Air India and Indian, asked the Indian government, its owner, in October for an equity infusion of 12.31 billion Indian rupees and a soft loan of 27.5 billion Indian rupees at an interest rate of 5% that it proposed to repay over 15 years, he revealed.
The government agreed to help Air India in June, and Patel said that his ministry is working with the airline to revamp the its operations as part of its bail-out. This includes changes to the airline's management and board, and the appointment of a chief operating officer to assist Air India's chairman and managing director Arvind Jadhav.
An international advisory board, which could include former heads of major global airlines, will also be formed and help in the carrier's transformation. Ratan Tata, chairman of the Tata Group, who was Air India's non-executive chairman in the late 1980s, could head this board, says Patel. His company is India's largest business house, and its first chairman formed Air India in the 1930s.
The aim is to "set the turnaround path for Air India" and the ministry is "working on a complete re-jig," says Patel.
"You will see in the next 30 days a major change in the top management in Air India. You are going to see a major change in the board. Some heads are going to roll. We are going to bring high-quality people with a proven track record in business," he added.